Why are Luxury Watches so Expensive?

Along with sports cars, fine wines and yachts, Swiss watches are one of those products inextricably associated with luxury. Whether you see them as status symbols, investment opportunities or simply superb examples of design and craftsmanship, if you want a true luxury timepiece you have to be prepared to pay the big bucks.

While you can get an excellent piece of wristwear from major fashion brands from under a grand, the luxury category really starts at around the £1,000 bracket. To buy one of the big boys though – an Audemars Piguet, Hublot, Zenith, Raymond Weil or Rolex – you’re looking at a minimum of £5,000 with prices rapidly escalating from there depending on the watch’s spec. Higher end models from these brands can easily cost upwards of forty or fifty grand.

So why, exactly, do luxury watches cost so much and what bells and whistles affect the price?

The movement

The correct lingo for the gubbins that actually powers a watch is the ‘movement’. Mass market watches usually have a quartz movement, using the vibration of a tiny crystal to regulate the tick of the watch. They’re pretty accurate; a quartz watch only loses about a minute each year and is perfectly adequate for anyone who wants a classy timepiece without laying down a few thousand pounds.

Not for the true watch aficionado though. The higher end of the market is all about mechanical movements, remarkable feats of micro-engineering that pack around a hundred parts into a space the size of a large coin. Naturally, this sort of precision engineering comes at a price. Some of the hottest (and most expensive) Swiss watches on the market right now are those with manually-wound mechanical movements with their gears, springs and cogs all proudly on display.

It’s complicated

While any watch’s main function is to tell the time, designers love to pack high-end timepieces full of added features. In the industry, these are called ‘complications’ and they include everything from chronographs – a mechanical stopwatch within the watch – to worldtimers, moonphase and perpetual calendars. Each of these intricate mechanisms are technical marvels in and of themselves and, of course, all contribute to a higher sticker price on the watch.

The materials

Watchmaking is an industry steeped in tradition and there’s only so far designers can deviate from the basic technical principles before potential buyers cry foul. So instead the key area for innovation these days is materials science and as you might expect, the more cutting edge and daring the materials used to make the case and the watch’s internals, the higher the price tag.

Stainless steel, gold and silver all still have their place but exotic metals, alloys, ceramics and composites like carbon fibre are the bleeding edge right now. Audemars Piguet and Hublot have both cultivated a reputation for pushing the envelope in this area and their special release watches made from unusual materials are among the most sought after timepieces out there.

The extras

Although watch faces, cases and movements get all the attention, your choice of strap can add a pretty penny to the final price of a luxury watch. While some strap materials reflect the ostensible function for a watch – a diving watch will have a rubber strap and something dressy might have a satin strap, for example – bracelets are another area for watchmakers to show off cutting edge engineering and materials science. Think precious metals, clever linking systems and eye-catching finishes. Combine with a mechanical movement, a few complications and a high-end case and you’re looking at lightening your bank account by tens of thousands of pounds.

The craftsmanship

Along with tradition and heritage, it’s craftsmanship that really sets Swiss watches apart from those made elsewhere. Over a hundred tiny parts go into the making of a luxury watch and these are all assembled by hand in a process takes anywhere from 10 hours to a couple of weeks.

As you can imagine, an artisan watchmaker’s time in a country with a high cost of living like Switzerland doesn’t come cheap, so the labour cost quickly adds up. And that’s only for building the thing. Designing a new watch is a process that can take a whole team of designers and engineers two years, all of which is factored into the final price of the timepiece.